Just scanning through some of the overnight bank notes, this on the Canadian dollar
via Scotiabank (in brief, bolding mine)
CAD ... a relative underperformer in an environment of broad-based USD weakness
An event-risk-filled week
- resumption of NAFTA talks (Feb 26-March 6)
- Tuesday's federal budget
- Thursday's current account
- Friday's GDP figures (December and Q4)
Broader developments remain dominant ... last week's remarkably short-lived reactions to high-level domestic releases with notable surprises and disappointments to CPI and retail sales.
- Ultimately, domestic rate expectations have remained relatively steady with OIS pricing a roughly 50% chance of an April BoC hike.
- Interest rate differentials are a headwind with the 2Y U.S.-Canada spread hovering around 45bpts at levels last seen in late June.
- Measures of sentiment are somewhat ambiguous as risk reversals remain relatively elevated and CFTC data suggest a paring of risk to both gross long and gross short positions.
USDCAD short-term technicals:
- Neutral-USDCAD's technical picture is conflicted
- Contrast between bullish trend and momentum indicators and the bearish reversal signal delivered on Friday with the completion of a three candle 'evening star'.
- We await a sustained break of either the 100 (1.2629) or 200 (1.2698) day MA's on a closing basis.
- Support is expected between 1.2550 and 1.2580.
- Resistance is expected between 1.2720 and 1.2750.
